A Thought-Provoking Warning in the Oil Industry; We Will Become Importers of Products from Iraq

The trend of investment and development in the oil industry and policies in this area have led to a thought-provoking warning from a member of the Energy Commission of the Chamber of Commerce, who stated that if "we continue on this path, we will become importers of products from Iraq." Hamidreza Salehi emphasized that with this trend, instead of being able to become the "energy hub" of the region and "export products and define regional prices, we will become passive." The ILNA news agency also reported that Iraq has plans in place to achieve self-sufficiency in petroleum products. According to the Iraqi Ministry of Oil, the country will announce self-sufficiency in all petroleum products and fuels next year, and the import file will be closed after the operation of dozens of advanced refineries with high production capacity in most provinces of the country. Hamidreza Salehi also pointed out this issue, stating, "Unfortunately, we have faced problems in optimizing consumption and production due to the state-controlled economy." Salehi criticized state management, emphasizing that unexecuted construction projects have led to a decrease in government revenues due to reduced oil production and exports, and that construction projects have either not been executed or we have not allowed the private sector to invest. According to this Chamber of Commerce activist, Iraq's developmental conditions and the use of international capacities by this country, alongside Iran's limitations and backwardness, will ultimately turn Iran into an importer of products from Iraq. Following the imbalance in gasoline production and consumption, the Fars news agency reported on February 1, 2023, that if attention is not paid to increasing gasoline production or optimizing consumption, the government will have to spend $5 billion annually on gasoline imports at a rate of 60 cents per liter to cover a daily deficit of 22 million liters by the year 2040. However, this prediction did not reach the year 2040, and this year's created imbalance led to imports. Iranian media reported that since the beginning of the last quarter of 2022, between $4 to $5 million worth of gasoline has been imported daily, but the Raisi government strongly denies any gasoline imports, although economic indicators have recorded this trend based on Central Bank statistics. According to members of the Islamic Consultative Assembly, the budget for gasoline imports in 2024 is projected to exceed $2 billion. The gas sector is also in a critical situation, as on January 16, Hashem Arouyi, the head of the Iranian Scientific Energy Associations Union, warned that "if necessary investments are not made, we will lose one phase of South Pars every year starting from 2025." Experts estimate that the necessary investment to maintain the current status in the oil, gas, and petrochemical industries exceeds $150 billion; an amount that is beyond the capabilities of the Islamic Republic and sanctions have nearly eliminated the possibility of foreign investors' presence. In September of this year, a spokesperson for the U.S. State Department told the Persian section of Voice of America that the Biden administration will continue to implement "strict" sanctions against the Islamic Republic, including those related to oil and petrochemical trade, considering it part of the U.S. government's actions against the destabilizing behaviors of the Iranian regime "from terrorist plots to missile programs."